Solar companies in Queensland fear a dramatic bust following the boom after a government decision to slash feed-in tariffs provided to consumers for energy they contributed back into the grid through solar power systems installed at their premises.
On Monday, the Queensland government announced that the existing tariff scheme, under which households receive 44 cents per kilowatt hour of energy contributed back into the grid, will close to new applicants at midnight on July 9.
Instead, those who install new solar systems after this date will come under a new replacement scheme and will be paid feed-in tariffs of just eight cents per kilowatt hour.
Energy and Water Supply Minister Mark McArdle says the scheme, which started in 2008, had met its objectives but was now becoming unsustainable and a burden on those who were unable to afford solar panels.
“Rising future costs associated with delivering the scheme means change is essential to protect Queenslanders from significant power bill increases,” McArdle says.
But the moves have been greeted with disappointment from the renewable energy sector.
Stuart Stratton of solar panel installation firm Green Initiatives has expressed extreme disappointment with the sudden nature of the change.
“Where [the tariff rate] drops over time and it’s predictable, the market can shift and your business can plan for staffing levels and training,” Stratton is quoted as saying in the Australian Associated Press. “When something like this happens out of the blue and you’ve got two weeks to adjust, it has potentially a massive downward impact on the business.”
Stratton says he expects the next two weeks to be like ‘Christmas in July’ followed by a substantial quiet period thereafter.
Clean Energy Council acting Chief Executive Kane Thornton says that although it was appropriate in light of the success of solar and the reduction in the cost of solar systems in recent times for the government to reduce the level of its support scheme, the sudden nature of the decision would have a serious negative impact on the industry.
Thornton says the scheme has stimulated around $2.37 billion worth of private investment and that the state’s solar industry now employs around 11,000 workers – more than 4,500 of whom he says could lose their jobs over the course of the next 12 months.
The reduction in tariffs follows McArdle’s decision on June 22 to end the state’s solar hot water rebate program.